1) Sara Smith plans to have $50 withheld from her monthly paycheckand deposited in a savings account that earns 12% annually,compounded monthly. If Malone continues with her plan for one andone-half years, how much will be accumulated in the account on thedate of the last deposit? (Use TableB.4) (Round "FV factor"to 4 decimal places andfinal answer to 2 decimal places. Omit the "$" sign in yourresponse.)
Amount in the account?
2) On January 1, 2011, a company agrees to pay $21,000 in fiveyears. If the annual interest rate is 3%, determine how much cashthe company can borrow with this agreement. (Use Table B.1)(Round "PV factor" to 4 decimal places and final answer to thenearest dollar amount. Omit the "$" sign in yourresponse.)
3) John Smith finances a new automobile by paying $5,800 cash andagreeing to make 20 monthly payments of $570 each, the firstpayment to be made one month after the purchase. The loan bearsinterest at an annual rate of 12%. What is the cost of theautomobile? (Use Table B.3)(Do not round intermediate calculations. Round "PV Factor" to 4decimal places and final answer to 2 decimal places. Omit the "$"sign in your response.)
1) Sara Smith plans to have $50 withheld from her monthly paycheckand deposited in a savings account that earns 12% annually,compounded monthly. If Malone continues with her plan for one andone-half years, how much will be accumulated in the account on thedate of the last deposit? (Use TableB.4) (Round "FV factor"to 4 decimal places andfinal answer to 2 decimal places. Omit the "$" sign in yourresponse.) |
Amount in the account?
2) On January 1, 2011, a company agrees to pay $21,000 in fiveyears. If the annual interest rate is 3%, determine how much cashthe company can borrow with this agreement. (Use Table B.1)(Round "PV factor" to 4 decimal places and final answer to thenearest dollar amount. Omit the "$" sign in yourresponse.)
3) John Smith finances a new automobile by paying $5,800 cash andagreeing to make 20 monthly payments of $570 each, the firstpayment to be made one month after the purchase. The loan bearsinterest at an annual rate of 12%. What is the cost of theautomobile? (Use Table B.3)(Do not round intermediate calculations. Round "PV Factor" to 4decimal places and final answer to 2 decimal places. Omit the "$"sign in your response.)
Related questions
Stowers Research issues bonds dated January 1, 2011, that payinterest semiannually on June 30 and December 31. The bonds have a$34,000 par value and an annual contract rate of 8%, and theymature in 10 years. |
| Required: |
| Consider each of the following three separate situations. (UseTableB.1, TableB.3) |
| 1. | The market rate at the date of issuance is 6%. |
| (a) | Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to4 decimal places, intermediate calculations and final answer to thenearest dollar amount. Omit the "$" sign in yourresponse.) |
| Issue price | $ |
| (b) | Prepare the journal entry to record their issuance. (Round "PV Factors" to4 decimal places, intermediate calculations and final answers tothe nearest dollar amount. Omit the "$" sign in yourresponse.) |
| Date | General Journal | Debit | Credit |
| Jan. 1 | (Click to select)CashDiscount on bonds payableAccountsreceivableBond interest payableBond interest expensePremium onbonds payableAccounts payableBonds payable | ||
| (Click to select)Premiumon bonds payableBond interest expenseBonds payableCashDiscount onbonds payableAccounts payableAccounts receivableBond interestpayable | |||
| (Click to select)Bondinterest payableDiscount on bonds payableAccounts payablePremium onbonds payableBonds payableBond interest expenseAccountsreceivableCash | |||
| 2. | The market rate at the date of issuance is 8%. |
| (a) | Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to 4 decimal places, intermediate calculationsand final answer to the nearest dollar amount. Omit the "$" sign inyour response.) |
| Issue price | $ |
| (b) | Prepare the journal entry to record their issuance. (Round "PV Factors" to 4 decimal places, intermediate calculationsand final answers to the nearest dollar amount. Omit the "$" signin your response.) |
| Date | General Journal | Debit | Credit |
| Jan. 1 | (Click to select)Accounts receivableBond interestexpenseBond interest payableBonds payableCashAccountspayablePremium on bonds payableDiscount on bonds payable | ||
| (Click to select)AccountspayableDiscount on bonds payablePremium on bonds payableBondinterest expenseCashAccounts receivableBond interest payableBondspayable | |||
| 3. | The market rate at the date of issuance is 10%. |
| (a) | Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to 4 decimal places, intermediate calculationsand final answer to the nearest dollar amount. Omit the "$" sign inyour response.) |
| Issue price | $ |
| (b) | Prepare the journal entry to record their issuance. (Round "PV Factors" to 4 decimal places, intermediate calculationsand final answers to the nearest dollar amount. Omit the "$" signin your response.) |
| Date | General Journal | Debit | Credit |
| Jan. 1 | (Click to select)Bond interest payableAccountsreceivableBond interest expensesAccounts payableCashDiscount onbonds payablePremium on bonds payableBonds payable | ||
| (Click to select)Accounts receivablePremium on bondspayableDiscount on bonds payableBond interest expensesCashBondspayableBond interest payableAccounts payable | |||
| (Click to select)Premiumon bonds payableCashDiscount on bonds payableAccountsreceivableBonds payableBond interest expenseAccounts payableBondinterest payable | |||
Stowers Research issues bonds dated January 1, 2011, that payinterest semiannually on June 30 and December 31. The bonds have a$34,000 par value and an annual contract rate of 8%, and theymature in 10 years. |
| Required: |
| Consider each of the following three separate situations. (UseTableB.1, TableB.3) |
| 1. | The market rate at the date of issuance is 6%. |
| (a) | Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to4 decimal places, intermediate calculations and final answer to thenearest dollar amount. Omit the "$" sign in yourresponse.) |
| Issue price | $ |
| (b) | Prepare the journal entry to record their issuance. (Round "PV Factors" to4 decimal places, intermediate calculations and final answers tothe nearest dollar amount. Omit the "$" sign in yourresponse.) |
| Date | General Journal | Debit | Credit |
| Jan. 1 | (Click to select)Premium on bonds payableAccountsreceivableCashDiscount on bonds payableBond interest payableBondinterest expenseBonds payableAccounts payable | ||
| (Click to select)AccountsreceivablePremium on bonds payableAccounts payableBonds payableBondinterest payableDiscount on bonds payableCashBond interestexpense | |||
| (Click to select)Discounton bonds payablePremium on bonds payableAccounts payableBondinterest payableAccounts receivableCashBonds payableBond interestexpense | |||
| 2. | The market rate at the date of issuance is 8%. |
| (a) | Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to 4 decimal places, intermediate calculationsand final answer to the nearest dollar amount. Omit the "$" sign inyour response.) |
| Issue price | $ |
| (b) | Prepare the journal entry to record their issuance. (Round "PV Factors" to 4 decimal places, intermediate calculationsand final answers to the nearest dollar amount. Omit the "$" signin your response.) |
| Date | General Journal | Debit | Credit |
| Jan. 1 | (Click to select)Bond interest expensePremium on bondspayableBonds payableDiscount on bonds payableBond interestpayableAccounts receivableAccounts payableCash | ||
| (Click to select)Premiumon bonds payableAccounts receivableDiscount on bonds payableBondinterest payableAccounts payableCashBond interest expenseBondspayable | |||
| 3. | The market rate at the date of issuance is 10%. |
| (a) | Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to 4 decimal places, intermediate calculationsand final answer to the nearest dollar amount. Omit the "$" sign inyour response.) |
| Issue price | $ |
| (b) | Prepare the journal entry to record their issuance. (Round "PV Factors" to 4 decimal places, intermediate calculationsand final answers to the nearest dollar amount. Omit the "$" signin your response.) |
| Date | General Journal | Debit | Credit |
| Jan. 1 | (Click to select)Bonds payableCashDiscount on bondspayablePremium on bonds payableAccounts receivableAccountspayableBond interest payableBond interest expenses | ||
| (Click to select)Bonds payableCashPremium on bondspayableAccounts payableDiscount on bonds payableBond interestexpensesAccounts receivableBond interest payable | |||
| (Click to select)BondspayableBond interest expenseAccounts receivableCashAccountspayablePremium on bonds payableDiscount on bonds payableBondinterest payable | |||
